Maersk raises full-year financial forecast for fourth time as Red Sea conflict offsets excess shipping capacity
Maersk, the Danish shipping giant, has once again revised its financial forecast for the year, marking the fourth upward adjustment in six months. The company attributes this change to stronger demand and higher freight costs resulting from disruptions in the supply chain due to recent incidents in the Red Sea.
On Monday, October 21, Maersk announced that it now expects its earnings before interest, taxes, depreciation, and amortization (EBITDA) for the year to be between $11 billion and $11.5 billion, up from the previous estimate of $9 billion to $11 billion. Analysts surveyed by Bloomberg had projected an average of $10.1 billion.
This latest forecast follows earlier adjustments made in May, June, and August, largely due to the unexpected impact of the Red Sea conflicts on global shipping supply chains. Since late last year, Yemen’s Houthi movement has launched attacks that have forced container ships to reroute around South Africa, alleviating some of the oversupply in the container industry and helping to boost freight rates.
Earlier this month, Maersk announced plans to enter into a vessel-sharing agreement with German competitor Hapag-Lloyd for routes to South Africa starting in 2025, while also stating that it anticipates the Red Sea will continue to be unsafe next year.
Furthermore, Maersk now expects global container shipping demand to grow by 6% this year, an increase from its previous forecast of 4% to 6%. During trading, Maersk’s American Depositary Receipts (ADRs) saw a peak increase of 7% before closing with a gain of 3.29%.
Controlling about one-sixth of the world’s container trade, Maersk has been actively seeking growth in land transport and freight forwarding, sectors that typically have higher profit margins than shipping. However, last quarter, the company opted out of acquiring the logistics division of DB Schenker from Germany’s railway company, a deal that ultimately went to Danish logistics provider DSV A/S for €14.3 billion ($15.5 billion).
